Hungary’s MOL Group said it signed a preliminary agreement to buy a 56.15% stake in Serbia’s NIS, the Russia-owned oil supplier that has been sanctioned by the United States.
In a statement Monday, MOL said the deal is set through a binding Heads of Agreement with Gazprom Neft, but it cannot be completed unless the transaction receives approval from the U.S. Office of Foreign Assets Control.
MOL and Gazprom Neft said they aim to sign the sales and purchase agreement by March 31. MOL said the purchase would further strengthen MOL’s presence in the regional energy market.
NIS “almost entirely controls Serbia’s oil market” and operates Serbia’s only oil refinery, according to the statement cited by The Associated Press. MOL also said it would contribute to the development of Central and Southeastern Europe, with CEO Zsolt Hernadi saying, “As a reliable regional energy provider, we would like to contribute to the development of Central and Southeastern Europe.”
Hernadi said MOL and ADNOC, the national oil company of the United Arab Emirates, are also in negotiations for ADNOC to possibly join as a minority shareholder.
Serbia’s Energy Minister Dubravka Djedovic Handanovic said the expected agreement would increase Serbia’s stake in NIS by 5% from the 29.87% it currently owns. She described the move as part of Serbia’s ownership position in the company.
The reporting comes as Washington has tightened sanctions connected to Russia’s energy sector. The U.S. imposed sanctions on NIS as part of that crackdown last year, and they went into effect in October. NIS has an OFAC license to negotiate the sale by March 24, the AP report said.
Serbia is formally seeking European Union membership, while maintaining strong ties with Moscow and refusing to join Western sanctions imposed on Russia over the Ukraine invasion, according to the AP account. Serbia sold the majority stake in NIS to Russia in 2008.